Costs & Taxes
Service Charge
Annual fee for maintenance of communal areas
Full Definition
Service charges cover maintenance of communal areas, buildings insurance, and management in leasehold properties. Charges vary significantly from £500-£5,000+ annually depending on services provided. High service charges reduce net yields. Always request service charge accounts and check for planned major works before purchasing.
Related Terms
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Stamp Duty Land Tax (SDLT)
Tax paid when purchasing property over £250,000
LBTT (Land and Buildings Transaction Tax)
Scottish equivalent of Stamp Duty
LTT (Land Transaction Tax)
Welsh equivalent of Stamp Duty
Capital Gains Tax (CGT)
Tax on profit when selling investment property
Section 24 (Mortgage Interest Relief)
Restriction on mortgage interest tax deductions for landlords
Limited Company Buy-to-Let
Purchasing properties through a company structure